Bank of Israel Governor to CNN 'Hasty judicial reform could lead to brain drain'

The governor of the Bank of Israel warned Tuesday that the “hasty” passage of the government’s judicial overhaul plan could hurt the Israeli economy and lead to “brain drain,” with highly skilled tech workers leaving the country.

Speaking with CNN Tuesday, Bank of Israel Governor Amir Yaron claimed the government’s judicial reform plan would “weaken some of” the Israeli judiciary’s independence, without offering details.

He also criticized the process of passing the reform, dubbing it “hasty,” and pointing to the lack of consensus on the overhaul plan.

“The changes in the judicial reform could weaken some of this [judicial] independence,” Yaron said. “Moreover, the process itself is hasty, and one that does not have a wide agreement in the public.”

The reform plan, proposed by Justice Minister Yariv Levin two months ago, is currently making its way through the Knesset in several separate bills.

If passed, the overhaul would grant the government greater influence over the selection of new judges, limit the ability of the court to strike down laws, offer the Knesset an override to reinstate overturned laws, give government ministries independence in choosing their legal advisers, and restrict the judiciary’s use of the reasonableness standard to nullify administrative decisions.

The proposed changes have drawn significant criticism from the Opposition, and fueled a massive protest movement with rallies drawing hundreds of thousands of demonstrators.

“We have seen some hi-tech leaders and industry leaders tell us that maybe investments won’t come in,” Yaron continued. “And some of them are even talking that they might take their business elsewhere.”

“In the long-run, the implication might be brain drain. This is why this needs to be handled with care, this has huge implications, and it is imperative that we maintain the strength and independence of the judiciary and that this is done in a way that has a wide acceptance in the public and is a transparent process.”

Yaron did defend the government’s support for the Bank of Israel, noting that Prime Minister Benjamin Netanyahu and Finance Minister Bezalel Smotrich both stood up for the bank’s right to determine lending rates, amid criticism from within the Coalition.

“The prime minister himself and also the finance minister immediately, when these issues came up, stated very clearly that only the governor decides on the interest rates.”